Remain no longer a racing certainty

Odds against Brexit narrowing

by William Keegan in London

Fri 17 Jun 2016

As the 23 June referendum approaches and the nation seems (in my opinion insanely) heading for a plunge into the ‘Brexit unknown’, I fear my Remain colleagues can no longer derive much comfort from the disparity between the predictions of the opinion polls and the bookmakers.

I confess that, as a racing man, I have always been surprised by the degree to which Remainers have tended to say ‘the bookies know best’.

Certainly, the bookies know quite a lot. But in the end the state of their ‘book’ is conditioned less by their often highly experienced opinion than by the sheer flow of money.

Not so long ago the odds on Remain were as good as seven to one on. That meant that there was so much money going on a Remain vote that one had to put down – the euphemism would be ‘invest’ – £7 to win £1; or, to take another example, £70 to win £10. In other words, Remain was considered such a 'racing certainty' that many people thought it was worth risking losing a lot of money to win comparatively little.

However, the odds from William Hill as I write have weakened to the point where the odds on Remain are now eight to 15. That is to say, if you put £15 on Remain, you will win £8 if the UK votes to stay on 23 June. From this narrowing of the odds alone, you can deduce that, while still favourite, Remain is no longer the very hot favourite it once was.

Conversely, the odds against a Brexit vote have narrowed from three to one to six to four – that is, a £4 bet will win £6 in the event of a Remain vote, whereas some time ago the same bet would have won you £12.

The explanation for this turn of events is, I think, quite simple. A few months ago, and indeed until relatively recently, the Remain camp was quite confident and attracted a huge amount of bets. More recently, as the polls have narrowed and even indicated a Brexit, the money has being going on a Leave vote, to the point where just over 72% of individual bets are for Brexit.

We Remainers can no longer cite the bookies as indicating we should not be so worried about the very close – and in some cases pro-Brexit – outcome that the polls are indicating.

William Keegan is Senior Economics Commentator at The Observer and a member of the OMFIF Advisory Board. This is No.96 in the series – the 100th article will appear on 23 June.

OMFIF’s series on the UK EU referendum presents a wide variety of perspectives from Britain and around the world ahead of the 23 June poll. We are assuring a balance between many different points of view, in line with OMFIF’s overall neutral stance on the issue.